NATIONAL MINIMUM WAGE BILL - Parliament of South Africa
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REPUBLIC OF SOUTH AFRICA
NATIONAL MINIMUM WAGE
BILL
(As amended by the Portfolio Committee on Labour (National Assembly))
(The English text is the offıcial text of the Bill.)
(MINISTER OF LABOUR)
[B 31B—2017] ISBN 978-1-4850-0468-4
No. of copies printed ....................................... 800BILL
To provide for a national minimum wage; to establish the National Minimum Wage
Commission; to provide for the composition and functions of the National
Minimum Wage Commission; to provide for the review and annual adjustment of
the national minimum wage; to provide for exemption from paying the national
minimum wage; and to provide for matters connected therewith.
PREAMBLE
RECOGNISING that the Republic of South Africa is one of the most unequal societies
in the world and that there are huge disparities in income in the national labour market;
NOTING the need to eradicate poverty and inequality;
ACKNOWLEDGING the need to promote fair and effective competition in the labour
market and labour market stability;
NOTING the constitutional obligation on the State and employers to promote and fulfil
the right to fair labour practices;
E IT THEREFORE ENACTED by the Parliament of the Republic of South Africa,
B as follows:—
ARRANGEMENT OF SECTIONS
Sections
CHAPTER 1 5
INTERPRETATION, PURPOSE AND APPLICATION
1. Definitions
2. Purpose of Act
3. Application of Act
CHAPTER 2 10
NATIONAL MINIMUM WAGE
4. National minimum wage
5. Calculation of wage
6. Annual review
7. Conduct of annual review 153
CHAPTER 3
NATIONAL MINIMUM WAGE COMMISSION
8. Establishment of Commission
9. Composition of Commission
10. Appointment and termination of appointment of members of Commission 5
11. Functions of Commission
12. Conduct of meetings of Commission
13. Secretariat of Commission
14. Funds of Commission
CHAPTER 4 10
GENERAL
15. Exemptions
16. Regulations
17. Short title and commencement
SCHEDULE 1 15
NATIONAL MINIMUM WAGE
SCHEDULE 2
LEARNERSHIP ALLOWANCES4
CHAPTER 1
INTERPRETATION, PURPOSE AND APPLICATION
Definitions
1. In this Act, unless the context indicates otherwise—
‘‘Basic Conditions of Employment Act’’ means the Basic Conditions of 5
Employment Act, 1997 (Act No. 75 of 1997);
‘‘Cabinet’’ means the cabinet referred to in section 91 of the Constitution of the
Republic of South Africa, 1996;
‘‘Commission’’ means the National Minimum Wage Commission established in
terms of section 8; 10
‘‘employer’’ means any person who is obliged to pay a worker for the work that
that worker performs for that person;
‘‘Labour Relations Act’’ means the Labour Relations Act, 1995 (Act No. 66 of
1995);
‘‘Minister’’ means the Minister of Labour; 15
‘‘national minimum wage’’ means the national minimum wage determined in
Schedule 1 and adjusted annually in terms of section 6;
‘‘NEDLAC’’ means the National Economic Development and Labour Council
established in terms of section 2 of the National Economic Development and
Labour Council Act, 1994 (Act No. 35 of 1994); 20
‘‘ordinary hours of work’’ means the hours of work permitted in terms of section
9 of the Basic Conditions of Employment Act or in terms of any agreement in terms
of section 11 or 12 of the Basic Conditions of Employment Act;
‘‘organised business’’ means organised business as defined in the National
Economic Development and Labour Council Act, 1994 (Act No. 35 of 1994); 25
‘‘organised community’’ means those non-governmental organisations contem-
plated in the National Economic Development and Labour Council Act, 1994
(Act No. 35 of 1994);
‘‘organised labour’’ means organised labour as defined in the National Economic
Development and Labour Council Act; 30
‘‘prescribed’’ means prescribed by regulation under this Act;
‘‘this Act’’ includes the regulations made under this Act;
‘‘wage’’ means the amount of money paid or payable to a worker in respect of
ordinary hours of work or, if they are shorter, the hours a worker ordinarily works
in a day or a week; and 35
‘‘worker’’ means any person who works for another and who receives, or is
entitled to receive, any payment for that work whether in money or in kind.
Purpose of Act
2. The purpose of this Act is to advance economic development and social justice
by— 40
(a) improving the wages of lowest paid workers;
(b) protecting workers from unreasonably low wages;
(c) preserving the value of the national minimum wage;
(d) promoting collective bargaining; and
(e) supporting economic policy. 45
Application of Act
3. (1) This Act applies to all workers and their employers except members of the
South African National Defence Force, the National Intelligence Agency and the South
African Secret Service.
(2) This Act does not apply to a volunteer, who is a person who performs work for 50
another person and who does not receive or is not entitled to receive, any remuneration
for his or her services.5
CHAPTER 2
NATIONAL MINIMUM WAGE
National minimum wage
4. (1) Subject to subsections (2) and (3), the national minimum wage is the amount
stated in Schedule 1 as adjusted annually in terms of section 6. 5
(2) (a) The Commission must, within 18 months of the commencement of this Act,
conduct a review of the national minimum wage contemplated in item 2(a) and (b) of
Schedule 1—
(i) in accordance with the process contemplated in section 6; and
(ii) taking into account the goals contemplated in section 7(a) and the factors listed 10
in section 7(b),
make recommendations to the Minister on the adjustment of the national minimum
wage contemplated in item 2(a) and (b) of Schedule 1, which recommendations must,
subject to the findings of the review contemplated in this paragraph, reflect an
adjustment that is equivalent to the national minimum wage contemplated in item 1 of 15
Schedule 1, or as close to that amount as the Commission’s findings allow.
(b) The Minister must, within two years of the commencement of this Act, and taking
the recommendations of the Commission into account, determine an adjustment of the
national minimum wage contemplated in item 2(a) and (b) of Schedule 1 in accordance
with the process contemplated in section 6. 20
(3) The national minimum wage in respect of workers in the extended public works
programme as contemplated in item 2(c) of Schedule 1 must be increased proportion-
ately to any adjustment of the national minimum wage as contemplated in section 6.
(4) Every worker is entitled to payment of a wage in an amount no less than the
national minimum wage. 25
(5) Every employer must pay wages to its workers that is no less than the national
minimum wage.
(6) The payment of a national minimum wage cannot be waived and the national
minimum wage takes precedence over any contrary provision in any contract, collective
agreement, sectoral determination or law, except a law amending this Act. 30
(7) The national minimum wage must constitute a term of the worker’s contract
except to the extent that the contract, collective agreement or law provides a wage that
is more favourable to the worker.
(8) It is an unfair labour practice for an employer to unilaterally alter wages, hours of
work or other conditions of employment in connection with the implementation of the 35
national minimum wage and sections 191, 193, 194(4) and 195 of the Labour Relations
Act apply, unless the context indicates otherwise.
(9) Sections 32, 33 and 34 of the Basic Conditions of Employment Act apply to the
payment of the national minimum wage to workers.
Calculation of wage 40
5. (1) Despite any contract or law to the contrary, the calculation of a wage for the
purposes of this Act is the amount payable in money for ordinary hours of work
excluding—
(a) any payment made to enable a worker to work including any transport,
equipment, tool, food or accommodation allowance, unless specified other- 45
wise in a sectorial determination;
(b) any payment in kind including board or accommodation, unless specified
otherwise in a sectoral determination;
(c) gratuities including bonuses, tips or gifts; and
(d) any other prescribed category of payment. 50
(2) Subject to section 9A of the Basic Conditions of Employment Act, a worker is
entitled to receive the national minimum wage for the number of hours that the worker
works on any day.
(3) Subject to subsection (2), if the worker is paid on a basis other than the number
of hours worked, the worker may not be paid less than the national minimum wage for 55
the ordinary hours of work.
(4) Any deduction made from the remuneration of a worker must be in accordance
with section 34 of the Basic Conditions of Employment Act, provided that a deduction6
made in terms of section 34(1)(a) of the Basic Conditions of Employment Act does not
exceed one quarter of a worker’s remuneration.
Annual review
6. (1) The Commission must review the national minimum wage annually and make
recommendations to the Minister on any adjustment of the national minimum wage, 5
which minimum wage must commence on a date fixed by the President by proclamation
in the Gazette.
(2) The review report to the Minister must reflect any alternative views, including
those of the public, in respect of any recommendations made in terms of subsection (1).
(3) The Commission must forward the report on its review and its recommendations 10
for the next year to the Minister on a date fixed by the President by proclamation in the
Gazette.
(4) If the Minister does not agree with, or requires clarity in respect of, the report and
recommendations, the Minister may, in the prescribed manner, refer the report and
recommendations back to the Commission to clarify or reconsider its recommendations. 15
(5) The Minister must, by a date fixed by the President by proclamation in the Gazette,
determine the adjustment to the national minimum wage, and by notice in the Gazette,
amend the national minimum wage contained in Schedules 1 and 2.
(6) The Minister must, within 7 days of the publication of the amended Schedules in
the Gazette, table the amended Schedules 1 and 2 in Parliament and publish the final 20
report of the Commission in a prescribed manner.
Conduct of annual review
7. For the purposes of conducting an annual review and recommending adjustments,
the Commission must—
(a) promote— 25
(i) the medium term targets referred to in section 11(d);
(ii) the alleviation of poverty; and
(iii) the reduction of wage differentials and inequality; and
(b) consider—
(i) inflation, the cost of living and the need to retain the value of the 30
minimum wage;
(ii) wage levels and collective bargaining outcomes;
(iii) gross domestic product;
(iv) productivity;
(v) ability of employers to carry on their businesses successfully; 35
(vi) the operation of small, medium or micro-enterprises and new enterprises;
(vii) the likely impact of the recommended adjustment on employment or the
creation of employment; and
(viii) any other relevant factor.
CHAPTER 3 40
NATIONAL MINIMUM WAGE COMMISSION
Establishment of Commission
8. The National Minimum Wage Commission is hereby established.
Composition of Commission
9. (1) The Commission comprises of the following members: 45
(a) A chairperson appointed by the Minister;
(b) three members nominated by organised business;
(c) three members nominated by organised community;
(d) three members nominated by organised labour; and
(e) three independent experts, who are knowledgeable about the labour market 50
and conditions of employment, appointed by the Minister.
(2) The members of the Commission must be citizens or permanent residents of the
Republic.7
Appointment and termination of appointment of members of Commission
10. (1) The Minister, after consultation with NEDLAC, appoints—
(a) the chairperson and the three independent experts; and
(b) the members nominated by organised business, organised community and
organised labour. 5
(2) The term of office for the members of the Commission is for a maximum period
of five years but members may be re-appointed.
(3) The members of the Commission are appointed on a part-time basis and on terms
and conditions prescribed by the Minister in consultation with the Minister of Finance.
(4) Termination of appointment may be effected in the following manner: 10
(a) The member’s death;
(b) the resignation of a member giving three months’ notice to the Minister; and
(c) subject to due process of law, the removal of a member from office by the
Minister for the following reasons:
(i) Serious misconduct; 15
(ii) permanent incapacity;
(iii) failure to attend three successive meetings without a reasonable
explanation; or
(iv) engaging in any activity that undermines the integrity of the Commis-
sion. 20
(5) The chairperson and members of the Commission—
(a) must act impartially when performing any function of the Commission;
(b) may not engage in any activity that may undermine the integrity of the
Commission; and
(c) must recuse themselves from advising the Minister on any matter in respect of 25
which they have a direct or indirect financial interest or any other conflict of
interest.
(6) The Commission must appoint a member to act as chairperson whenever the
chairperson is absent from the Republic or from duty, or for any reason is temporarily
unable to function as chairperson. 30
Functions of Commission
11. The functions of the Commission are to—
(a) review the national minimum wage and recommend adjustments;
(b) investigate and report annually to the Minister on the impact of the national
minimum wage on the economy, collective bargaining and the reduction in 35
income differentials and make such information available to the public;
(c) investigate income differentials and recommend benchmarks for proportion-
ate income differentials;
(d) set medium term targets for the national minimum wage within three years of
the commencement of this Act; and 40
(e) advise the Minister on measures to reduce income differentials or any other
matter on which the Minister requests the Commission’s advice;
(f) advise the Minister on sectoral determinations;
(g) advise the Minister on any matter concerning basic conditions of employ-
ment; and 45
(h) perform any such function as may be required of the Commission in terms of
any other employment law.’’.
Conduct of meetings of Commission
12. The Commission must determine its own rules on the conduct of meetings,
provided that those rules— 50
(a) require the Chairperson to act impartially; and
(b) provide that the chairperson has no deliberative vote or casting vote.
Secretariat of Commission
13. Subject to the laws governing the public service, the Minister must provide the
Commission with a secretariat and the necessary resources to perform the following 55
functions:8
(a) The administration of the Commission;
(b) the conduct and procurement of research for the Commission; and
(c) the monitoring and evaluation of the impact of the national minimum wage on
the economy and the reduction of income differentials.
Funds of Commission 5
14. The funds of the Commission consist of money defrayed from the budget vote of
the Department.
CHAPTER 4
GENERAL
Exemptions 10
15. (1) An employer or an employers’ organisation registered in terms of section 96 of
the Labour Relations Act, or any other law, acting on behalf of a member, may, in the
prescribed form and manner, apply for an exemption from paying the national minimum
wage.
(2) An exemption granted in terms of this section— 15
(a) must specify the period for which it is granted, which may not be longer than
one year;
(b) must specify the wage that the employer is required to pay workers; and
(c) may contain any other relevant condition.
(3) The Minister may delegate or assign powers or duties arising out of the application 20
of this section, excluding the power to make regulations, in accordance with the
provisions of section 85 of the Basic Conditions of Employment Act.
Regulations
16. (1) The Minister must, after consulting NEDLAC and where appropriate after
consulting the Commission, make regulations relating to— 25
(a) the form and manner in which exemptions must be made in terms of section
15(1), which include the—
(i) procedure for applying for an exemption;
(ii) information to be submitted with an exemption application;
(iii) obligations on employers to consult with employees or trade unions 30
concerning an exemption application;
(iv) criteria that must be applied when evaluating exemption applications;
(v) period within which an application must be made; and
(vi) period within which a decision on an exemption application must be
made; and 35
(b) the publication of data on exemptions.
(2) The Minister may make regulations which the Minister considers necessary or
expedient to be prescribed in order to achieve the primary objects of this Act.
(3) The Minister must publish the draft of any regulations that the Minister proposes
to publish in terms of this Act in the Gazette and allow interested parties at least 21 days 40
to comment in writing on the draft regulations.
(4) If the Minister alters the draft regulations based on the comments received from
interested parties, it shall not be necessary to publish those alterations before making the
final regulations.
(5) The Minister must table the regulations in Parliament. 45
Short title and commencement
17. (1) This Act is called the National Minimum Wage Act, 2018.
(2) Subject to subsections (3) and (4), the Act comes into operation on a date to be
fixed by the President by proclamation in the Gazette.
(3) Schedule 1 comes into effect on a date fixed by the President by proclamation in 50
the Gazette.
(4) Section 4(6) takes retrospective effect from 1 May 2017.9
SCHEDULE 1
NATIONAL MINIMUM WAGE
(Section 6(6))
1. Subject to item 2, the national minimum wage is R20 for each ordinary hour
worked.
2. Despite item 1—
(a) farm workers are entitled to a minimum wage of R18 per hour from a date
fixed by the President by proclamation in the Gazette;
(b) domestic workers are entitled to a minimum wage of R15 per hour from a date
fixed by the President by proclamation in the Gazette;
(c) workers employed on an expanded public works programme are entitled to a
minimum wage of R11 per hour from a date fixed by the President by
proclamation in the Gazette; and
(d) workers who have concluded learnership agreements contemplated in section
17 of the Skills Development Act, 1998 (Act No. 97 of 1998), are entitled to
the allowances contained in Schedule 2.
3. For the purposes of item 2—
‘‘farm worker’’ means a worker who is employed mainly or wholly in connection
with farming or forestry activities, and includes a domestic worker employed in a
home on a farm or forestry environment and a security guard on a farm or other
agricultural premises, excluding a security guard employed in the private security
industry in terms of the Private Security Industry Regulation Act, 2001 (Act No. 56
of 2001);
‘‘domestic worker’’ means a worker who performs domestic work in a private
household and who receives, or is entitled to receive, a wage and includes—
(a) a gardener;
(b) a person employed by a household as a driver of a motor vehicle;
(c) a person who takes care of children, the aged, the sick, the frail or the disabled;
and
(d) domestic workers employed or supplied by employment services; and
‘‘expanded public works programme’’ means a programme to provide public or
community services through a labour intensive programme determined by the
Minister in terms of section 50 of the Basic Conditions of Employment Act and
funded from public resources.10
SCHEDULE 2
LEARNERSHIP ALLOWANCES
(Section 6(6))
1. For the purposes of this Schedule—
‘‘allowance’’ means the amount of money paid or payable to a learner in terms of
regulation 3 of the Sectoral Determination 5: Learnership made under the Basic
Conditions of Employment Act, published in Government Notice 519 of 15 June
2001 as amended by Government Notice R.234 of 15 March 2011;
‘‘credit’’ means a credit earned as defined in the Regulations made under the South
African Qualifications Authority Act, 1995 (Act No. 58 of 1995), Government
Notice R.452, published in Government Gazette 18787 of 28 March 1998;
‘‘learner’’—
(a) means a learner who has concluded a learnership agreement in terms of
section 17 of Skills Development Act, 1998 (Act No. 97 of 1998); and
(b) includes an apprentice;
‘‘NQF level’’ means a level on the national qualifications framework contemplated
in the National Qualifications Framework Act, 2008 (Act No. 67 of 2008).
2. The learnership allowances are as follows:
NQF level Credits already earned by Minimum allowance per
learner week
Levels 1 to 2 0-120 R301.01
121-240 R601.99
Level 3 0-120 R301.01
121-240 R566.93
241-360 R928.11
Level 4 0-120 R301.01
121-240 R602.05
241-360 R928.11
361-480 R1354.51
Levels 5 to 8 0-120 R301.01
121-240 R652.15
241-360 R975.75
361-480 R1374.61
481-600 R1755.8411
MEMORANDUM ON THE OBJECTS OF THE NATIONAL MINIMUM
WAGE BILL, 2017
1. BACKGROUND
1.1 Section 7(2) of the Constitution of the Republic of South Africa, 1996 (‘‘the
Constitution’’), imposes an obligation on the State to respect, protect, promote
and fulfil the rights in the Bill of Rights, which include the right to fair labour
practices. In this respect, the proposed National Minimum Wage Bill, 2017
(‘‘the Bill’’), seeks to provide for a national minimum wage and establish the
National Minimum Wage Commission (‘‘the Commission’’), which will
amongst other things, implement the provisions relating to the national
minimum wage.
1.2 The South African labour market is characterised by high levels of inequality,
unemployment and poverty. One of the measures to reduce these levels is a
national minimum wage.
1.3 Such a measure respects and promotes the right to dignity and fair labour
practices.
1.4 To this end, the business, labour, community and government representatives
at the National Economic, Development and Labour Council (‘‘NEDLAC’’)
commissioned a task force to investigate and make recommendations on a
national minimum wage and a legislative mechanism for the annual
adjustment of the national minimum wage.
1.5 On the basis of the report from this task force, NEDLAC engaged in an
extensive process of consultation resulting in agreement in respect of the
national minimum wage and the mechanism for annual adjustment. The
resulting agreement constituted the basis for the drafting of this Bill, in order
to enact the envisaged National Minimum Wage Act, 2018 (‘‘the Act’’).
2. OBJECT OF BILL
The main object of the Bill is to provide for a national minimum wage in order to
advance economic development and social justice by improving the wages of
lowest paid workers, protecting workers from unreasonably low wages and
promoting collective bargaining and supporting economic policy.
3. CLAUSE-BY-CLAUSE ANALYSIS
3.1 Clause 1
Clause 1 of the Bill provides for the definitions which will assist in the
interpretation of the Bill.
3.2 Clause 2
Clause 2 of the Bill provides for the purpose of the Act which is to advance
economic development and social justice by improving the wages of lowest
paid workers, protecting workers from unreasonably low wages, promoting
collective bargaining and supporting economic policy.
3.3 Clause 3
Clause 3 outlines the application of the Act, which applies to all workers and
their employers except members of the South African National Defence
Force, the National Intelligence Agency and the South African Secret Service.12
3.4 Clause 4
3.4.1 Clause 4 of the Bill specifies the national minimum wage that was
agreed to at NEDLAC, and set out in Schedule 1 to the Bill. In terms
of Schedule 1 to the Bill the national minimum wage is R20 for each
ordinary hour worked, and is due to come into force on 1 May 2018.
The reason for placing it in a Schedule is that it is to be adjusted on an
annual basis.
3.4.2 In terms of clause 4 every worker is entitled to at least the national
minimum wage. An employer may not pay wages that are below the
national minimum wage and the national minimum wage cannot be
varied by contract, collective agreement or law, except a law
amending the Act.
3.4.3 The national minimum wage constitutes a term of the worker’s
contract except to the extent that the contract provides for a more
favourable wage.
3.4.4 In terms of the Bill it is an unfair labour practice for an employer to
unilaterally alter hours of work or other conditions of employment in
implementing the national minimum wage.
3.5 Clause 5
3.5.1 Clause 5 of the Bill provides for the calculation of the national
minimum wage. The national minimum wage is the amount payable
for the ordinary hours of work. This means that a worker is entitled to
receive the minimum wage for the number of hours that the worker
works in a day. This does not include the payment of allowances such
as transport, tool, food or accommodation allowances, payments in
kind (board or lodging), tips, bonuses and gifts. Provision is also made
for the exclusion of other forms of payment by regulation.
3.5.2 Clause 5 also provides that any deduction made from the remuneration
of a worker must be in accordance with section 34 of the Basic
Conditions of Employment Act, 1997 (Act No. 75 of 1997) (‘‘Basic
Conditions of Employment Act’’), provided that a deduction made in
terms of section 34(1)(a) of the Basic Conditions of Employment Act
does not exceed one quarter of a worker’s remuneration.
3.6 Clause 6
3.6.1 Clause 6 of the Bill provides for the annual review and adjustment of
the national minimum wage by the Commission, which must annually
review the existing national minimum wage, and make recommenda-
tions to the Minister, and the minimum wage must commence on a
date fixed by the President by proclamation in the Gazette. The
Commission must prepare a report with recommendations for the
Minister by a date fixed by the President by proclamation in the
Gazette, and if the Minister does not agree with the recommendations
of the Commission, the Minister may refer the report back to the
Commission to reconsider.
3.6.2 The Minister must, by a date fixed by the President by proclamation in
the Gazette, determine the adjustment to the national minimum wage,
and by notice in the Gazette, amend the national minimum wage
contained in Schedules 1 and 2.
3.6.3 The Minister must, within 7 days of the publication of the amended
Schedules in the Gazette, table the amended Schedules 1 and 2 in
Parliament.13
3.7 Clause 7
In terms of clause 7 of the Bill the Commission must conduct an annual
review of the national minimum wage by promoting medium term targets,
alleviation of poverty, the reduction of wage inequality, and in this regard take
into account factors such as inflation, cost of living and the need to retain the
value of the national minimum wage.
3.8 Clauses 8, 9 and 10
3.8.1 Clauses 8, 9 and 10 of the Bill provide for the establishment, the
composition and appointment of members of the Commission.
According to clause 9, the Commission consists of—
● an independent chairperson appointed by the Minister;
● three members nominated by organised business;
● three members nominated by organised community;
● three members nominated by organised labour; and
● three independent experts appointed by the Minister.
3.8.2 In terms of clause 10 the members of the Commission are appointed
by the Minister from members nominated by organised business,
organised labour and the organised community, in other words through
nomination by these three constituencies as they are constituted in
NEDLAC. The Minister also appoints the chairperson and three
independent experts after consultation with NEDLAC.
3.9 Clause 11
Clause 11 of the Bill provides for the functions of the Commission, which are
to review the national minimum wage and to make recommendations annually
for its adjustments. The Commission has ancillary functions such as
investigating the impact of the national minimum wage on the economy,
collective bargaining and income differentials. (read with the amendments to
the Basic Conditions of Employment Act, the Commission will take over the
functions of the disestablished Employment Conditions Commission).
3.10 Clause 12
Clause 12 of the Bill provides that the Commission must determine its own
rules in respect of the conduct of its meeting.
3.11 Clause 13
Clause 13 of the Bill provides for a secretariat of the Commission, which will
support the Commission with the responsibility of administering the
Commission, procurement of research and also monitor the impact and
evaluation of the national minimum wage on the economy and income
differentials.
3.12 Clause 14
Clause 14 of the Bill provides for the funds of the Commission which must
consist of money defrayed from the budget vote of the Department.
3.13 Clause 15
Clause 15 of the Bill empowers the Minister, on application by any relevant
employer, to grant exemptions from the national minimum wage, and
provides that the applications must be made in the prescribed form and
manner.14
3.14 Clause 16
3.14.1 Clause 16 of the Bill empowers the Minister to make regulations in the
form and manner in which exemptions must be made in terms of
clause 15, including the—
● procedure for applying for an exemption;
● information to be submitted with an exemption application;
● obligations on employers to consult with employees or trade unions
concerning an exemption application;
● criteria that must be applied when evaluating exemption applica-
tions;
● period within which an application must be made; and
● period within which a decision on an exemption must be made.
3.14.2 Clause 16 of the Bill also gives the Minister the power to make
regulations on any matter required or necessary to be prescribed. It
sets out a standard publication and comment procedure in respect of
interested parties.
3.15 Clause 17
Clause 17 provides for the short title and commencement of the various
provisions of the Bill.
3.16 Schedules 1 and 2
3.16.1 Schedule 1 to the Bill provides that the national minimum wage will
be R20 for each ordinary hour worked. Schedule 1 also provides for
temporary exceptions to the national minimum wage for the first year,
which is 1 May 2018, as follows:
● The minimum wage for farm workers will be R18 per hour;
● the minimum wage for domestic workers will be R15 per hour; and
● the minimum wage for workers in expanded public works
programme will be R11 per hour.
3.16.2 Schedule 2 specifies the learnership allowances in respect of workers
who conclude learnership agreements in terms of the Skills Develop-
ment Act, 1998 (Act No. 97 of 1998).
4. DEPARTMENTS/BODIES/PERSONS CONSULTED
The Department of Economic Development, Small Business Development, Trade
and Industry and the National Treasury were consulted on a regular basis during the
process of engagement in the National Economic Development and Labour
Council on the National Minimum Wage Bill. Organised business, organised
labour and the organised community sector were consulted during the engagement
in the National Economic Development and Labour Council.
5. FINANCIAL IMPLICATIONS
The National Minimum Wage Bill will require the Department of Labour to
establish a Secretariat to support the work of the National Minimum Wage
Commission. Provision has been made within the Medium Term Expenditure
Framwork for this cost.
6. PARLIAMENTARY PROCEDURE
6.1 The Constitution prescribes procedure for the classification of Bills, therefore
a Bill must be correctly classified so that it does not become inconsistent with
the Constitution.
6.2 The Office of the Chief State Law Adviser considered the Bill against the
provisions, of the Constitution relating to the tagging of Bills and against the15
functional areas listed in Schedule 4 (functional areas of concurrent national
and provincial legislative competence) and Schedule 5 (functional areas of
exclusive provincial legislative competence) to the Constitution.
6.3 The established test for classification of a Bill is that any Bill whose
provisions, in substantial measure, fall within a functional area listed in
Schedule 4 to the Constitution must be classified in terms of that Schedule.
The process is concerned with the question of how the Bill should be
considered by the provinces and in the National Council of Provinces.
Furthermore, how a Bill must be considered by the provincial legislatures
depends on whether it affects the provinces. The more the Bill affects the
interests, concerns and capacities of the provinces, the more say the provinces
should have on the contents of the Bill.
6.4 The issue to be determined is whether the proposed amendments to the Act, as
contained in the Bill, in substantial measure, fall within a functional area listed
in Schedule 4 to the Constitution.
6.5 The Bill seeks to provide for a national minimum wage, to establish the
Commission (and its composition and functions) in order to advance
economic development and social justice by improving the wages of lowest
paid workers, protecting workers from unreasonably low wages, promoting
collective bargaining and supporting economic policy. The functions of the
Commission, amongst others, are to review the national minimum wage and
to make recommendations annually for its adjustment. The Commission may
also investigate the impact of the national minimum wage on the economy,
collective bargaining and income differentials.
6.6 The Bill provides for the annual review and adjustment of the national
minimum wage by the Commission and the final determination thereof by the
Minister. The Commission has to take a number of factors into consideration
in conducting its review of the national minimum wage and its recommended
adjustment. These factors include the increase in inflation, the cost of living,
wage levels, wage differentials, productivity, the ability of businesses to carry
on successfully and the impact on small businesses and employment.
6.7 The Bill empowers the Minister, on application by any relevant employer, to
grant exemptions from the national minimum wage, the exercise of which is
to be regulated by regulations.
6.8 The Bill gives the Minister the power to make regulations regarding the
procedure for exemption, the obligation on employers to consult with
employees or their trade unions and the criteria for evaluating exemptions.
The Minister may also make regulations on any matter required or necessary
to be prescribed. It sets out a standard publication and comment procedure in
respect of interested parties.
6.9 Schedule 1 of the Bill provides for the national minimum wage of R20 for
each ordinary hour worked and also provides for temporary exceptions to the
national minimum wage for the first year, from 1 May 2018 i.e the national
minimum wage for farm workers will be R18 per hour, the national minimum
wage for domestic workers will be R16 per hour and R11 per hour for workers
in expanded public works programmes.
6.10 The provisions of the Bill as reflected above have been carefully examined to
establish whether, in substantial measure, they fall within any of the
functional areas listed in Schedule 4 to the Constitution.
6.11 In the view of the Office of the Chief State Law Adviser, the subject matter of
the provisions of the Bill does not fall within any of the functional areas listed
in Schedule 4 to the Constitution and it does not affect provinces whereby the
procedure set out in section 76 of the Constitution would be applicable.16
6.12 The Office of the Chief State Law Adviser is therefore of the opinion that since
this Bill does not deal with any of the matters listed in Schedule 4 of the
Constitution, it must be dealt with in accordance with the procedure set out in
section 75 of the Constitution.
6.13 The Office of the Chief State Law Adviser is also of the opinion that it is not
necessary to refer this Bill to the National House of Traditional Leaders in
terms of section 18(1)(a) of the Traditional Leadership and Governance
Framework Act, 2003 (Act No. 41 of 2003), since it does not contain
provisions pertaining to customary law or customs of traditional communities.
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